Company Number: 12729180

Analysis Date: 2025-07-29 19:10 UTC

1. Risk Rating: HIGH
   The company exhibits significant liquidity and solvency concerns, evidenced by persistent negative net current assets and a declining net asset base. The high level of short-term liabilities relative to current assets indicates potential difficulties in meeting obligations as they fall due.

2. Key Concerns:

• Negative Working Capital: The company has substantial net current liabilities (£232,149 as of 31 July 2024), indicating it does not have sufficient short-term assets to cover its short-term liabilities. This situation has persisted consistently over the last several years.
• Reliance on Director Advances: A notable creditor balance (£76,659) owed to a director, interest-free and repayable on demand, suggests dependency on related party funding to support liquidity, which may not be sustainable or formalized.
• Declining Net Asset Value: Net assets have decreased from £26,906 in 2023 to £17,857 in 2024, signaling erosion of equity and potential financial distress.

3. Positive Indicators:

• Stable Fixed Assets Base: The company holds tangible assets valued at £250,000, which have been maintained at this level and represent a material asset backing the business.
• No Overdue Filings: The company is current with both its annual accounts and confirmation statement, demonstrating compliance with statutory filing requirements.
• Ownership and Control: The company has clear ownership structure with identified Persons with Significant Control (PSCs), which may facilitate decision-making and governance.

4. Due Diligence Notes:

• Assess Valuation of Fixed Assets: The property valuation is director-based and should be independently verified for reliability and market accuracy.
• Review Director Loan Terms: Investigate the nature, terms, and sustainability of advances from directors, including repayment plans and potential impact on cash flows.
• Examine Cash Flow Projections: Given negative working capital, detailed cash flow forecasts and plans to address liquidity shortfalls are critical for assessing operational viability.
• Operational Income and Profitability: As abridged accounts exclude profit and loss details, further information on revenue streams, profitability, and cost structure is needed to evaluate business sustainability.
• Management and Governance: Confirm the experience and stability of management given recent director appointment changes, and review any related party transactions in detail.